Section 911

Credit Reports

911.01

Credit Report

Requirements

Within 90 days before the Commitment Date Commitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. , you must obtain credit reports for all individual

  • Borrowers BorrowersPerson who is the obligor per the Note. ,
  • Key Principals Key PrincipalsPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. ,
  • Guarantors GuarantorsKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , and
  • Principals PrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… . 

The credit reports must be from at least 2 of the following credit information services:

  • Equifax;
  • Experian; or
  • TransUnion.
911.02

FICO Scoring

Requirements

You must ensure that all individual Borrowers BorrowersPerson who is the obligor per the Note. , Key Principals Key PrincipalsPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , Guarantors GuarantorsKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , and Principals PrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… meet the Minimum FICO Requirement in  Form 4660 .

Guidance

To determine that the Minimum FICO Requirement is met, follow these guidelines:

If…

Then…

You obtain credit reports from 2 of the 3 credit information services for a Borrower, Key Principal, Guarantor, or Principal

Use the lower of the 2 scores.

You obtain credit reports from all 3 credit information services, for a Borrower, Key Principal, Guarantor, or Principal

Use the middle score.
A Small Mortgage Loan has multiple individual Borrowers, Key Principals, Guarantors, or Principals Use the average of their respective FICO scores.
911.03

Reviewing the Credit Report

Requirements

You must analyze the credit report for each individual Borrower BorrowerPerson who is the obligor per the Note. , Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , Guarantor GuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , and Principal PrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… . 

If the answer to any of the following Guidance questions is “yes”, then the Borrower BorrowerPerson who is the obligor per the Note. , Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , Guarantor GuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , or Principal PrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… must give you satisfactory explanations, even if they meet the Minimum FICO Requirement.

Guidance

As you analyze the credit report, consider the following questions:

  • Have any mortgage late payments occurred in the previous 36 months?
  • Have any revolving or installment late payments occurred within the previous 12 months?
  • Did you consider any of the credit card or other unsecured debt balances?
  • Have any tax liens been filed or reported within the previous 5 years?
  • Have any discharged bankruptcies or mortgage foreclosures occurred within the previous 10 years?
  • Are there any outstanding judgments or collections higher than $5,000?